The USD/JPY pair extended gains to fresh May 2019 highs around 110.30 early on Friday. The rally was helped by upbeat economic data out of China. China GDP growth in 2019 was 6.1%, in line with expectations. Despite the growth rate was the slowest in 29 years, the report was perceived as positive because many investors feared the numbers could come even lower, citing the trade dispute with the United States.
Against this backdrop, risk sentiment continued to improve, with Asian stock markets rose following fresh record highs on Wall Street. As such, USD/JPY continued yesterday’s rally and registered new seven-month highs above the 110.00 handle. Earlier, the pair received a boost amid broad-based dollar strength following better-than-expected US retail sales data.
Now, USD/JPY needs to confirm a break above the mentioned level on a weekly basis. Otherwise, the prices could correct lower to 109.80. in the near term, dynamics in the pair will depend on the upcoming economic reports out of the US, including housing starts, building permits, and industrial production. Should the numbers surprise to the upside as well, the pair may climb to fresh highs. Once above 110.30, the greenback may target the 110.70 area.